As the two main political parties compete to say who can cut what fastest, the National Housing Federation (NHF) has joined the chorus of voices calling for their sector to be protected. It warned today that the government will fail to meet even half its target of building a million affordable homes by 2020 if the housing budget is not exempted from public spending cuts.
So just what is the story with the housing crisis?
Well, to start at the beginning, the UK has a severe housing shortage. Even during the boom, we were unable to build houses at the rate they were required. The population is swelling because of immigration and higher birth rates, while the number of households is rising even faster than population because more people are living alone and more people have second properties. The government has stated in the past that we would need 240,000 extra houses a year to meet demand. The current rate is just 125,000.
So, in 2007, Gordon Brown pledged to build three million houses by 2020. Of these, one million were to be “affordable” homes. The dearth of low-cost rental properties is the most contentious and worrying aspect of the housing situation. Back in 2007, Jon Cruddas warned that it was “feeding political extremism”. Add to this the hardship caused by the recession, and there is a heightened risk of alienating those on lower incomes and pushing voters towards the populist posturing of the far right, which (inaccurately) racialises the housing shortage.
A substantial number of people are affected. There are now a record 4.5 million people on waiting lists for affordable housing. The NHF predicts that a further 1.25 million could find themselves in the same situation if spending cuts go ahead.
The NHF projection is based on cuts indicated in December’s pre-Budget report. The Institute for Fiscal Studies estimated that unprotected government departments would face budget cuts of 17.98 per cent. Judging by this figure, the number of affordable homes actually built by 2020 will be 440,000 — less than half the million planned.
A complicating factor is that the construction industry is always first to be hit in a recession. In fact, the picture looks even bleaker: the NHF estimates that, with these cuts, 278,000 jobs or apprenticeships will either be lost or not be created over the next ten years.
In response to the NHF warning, the housing minister John Healey said:
The Tories not only opposed us, they also proposed a £1bn cut in last year’s housing budget that would have seen 9,000 fewer homes built and the loss of many jobs in the construction industry. Taking this as a clear indication of Tory priorities, the NHF would do well to consider the threat a Cameron government would pose to affordable housing.
Attacking the opposition is the default position for both parties in the run-up to the general election, but it is singularly unhelpful here. The tit-for-tat adding of notional numbers to the mix will do nothing to tackle the deepening crisis.
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